House Passes Audit Integrity and Job Protection Act

The House of Representatives has approved a bill that bars the Public Company Accounting Oversight Board (PCAOB) from requiring public companies to change auditing firms automatically.

The PCAOB has been debating the issue, taking the question to accountants, investors, business leaders and others in meetings around the country since 2011. The Audit Integrity and Job Protection Act sponsors said that selecting a company’s external auditor should not be a decision made by a regulator, but by a public company’s board of directors and ratified by its shareholders.

Barry C. Melancon, president and CEO of the AICPA, applauded the decision. “In the absence of evidence that mandatory audit firm rotation would enhance audit quality, the House has sent regulators in the United States and Europe a clear message that the time has come to end the debate over rotation.”